An Overview of ESDC’s Proposed Changes to the Owner Operator LMIA and CAPIC’s Response
The Employment and Social Development Canada (ESDC) has proposed several changes to the current Owner Operator Labour Market Impact Assessment (LMIA) program. If these changes take effect as currently laid out, the implications on the program may be detrimental.
Although information on the potential changes has been scarce, the Canadian Association of Professional Immigration Consultants (CAPIC) has recently released an overview of some of the proposed changes as well as their reaction and response.
According to CAPIC, some of the changes proposed by ESDC include:
- Recruitment – Currently, applicants for an Owner Operator program are exempt from the LMIA advertising requirement. The proposed changes would require that potential owners make a reasonable and provable effort to hire a Canadian or permanent resident for the position that they themselves intend to fill.
- Wages & Working Conditions – Currently, applicants are not required to pay themselves the prevailing wage for their industry and position. ESDC’s changes require that the position be advertised (see above) at the prevailing wage and, if/when they hire themselves, they must pay themselves that wage.
- Genuineness – he business must be active and operating at the time of application and the owner must be materially involved for one year prior to applying for the program.
- Classification of Occupation – The employer must assign a correct National Occupational Classification (NOC) code that clearly distinguishes the role the potential Owner Operator is filling is at a senior management level.
CAPIC’s assessment of the potential changes is that they would effectively dismantle the current Owner Operator program. The program, as it currently stands, serves to aid in the economic recovery from COVID-19 as it contributes significantly to job creation and retention of jobs for Canadian citizens and legal residents.
Specifically, CAPIC’s points of response are outlined as follows:
- A business owner will not be able to make an unbiased hiring decision if required to post the job, as they, themselves, are one of the applicants.
- Requiring to pay an executive-level, six-figure salary to the owner/operator is detrimental to business cash flow as many business owners choose to defer salaries in order to reinvest in the business, especially in the first year.
- It is extremely difficult for potential owner/operators to be present and actively involved with the business for a year prior to applying for the Owner Operator LMIA program under Canada’s current immigration system.
- The Owner Operator LMIA program encourages investment and purchasing of businesses which only aids in the creation and retention of jobs.
- Meeting the NOC requirement is discouraging to potential investors as it is actually much easier and more advantageous to take an existing role in a well-established business.
A business plan, whether for immigration purpose or not, should always be written by an expert. Business plans are highly technical and require deep understanding of business models. They require knowledgeable experience and analysis of the industry and market. This knowledge allows business plan writers to complete one of the most specialized areas of the business plan, the financials. There is no room for error in financial projections. Numbers that are not fully thought out and supported will immediately invalidate a business plan.
Business plan writing requires a combination of general business acumen, research abilities, financial projection expertise, compelling writing skills and a knack for storytelling. However, even the best business plan writer will be unable to weave a convincing, engaging business plan if they don’t know the full story that is being told. This is where the need for collaboration between the immigration expert and the business plan writer becomes evident. Both professionals are keenly aware that a successful business immigration case is dependent on the ability to demonstrate the benefits the applicant and their business will bring to the Canadian economy.
The CAPIC official response goes on to address other key points and offers a host of suggestions for both short- and long-term improvements to the program that would be beneficial both to potential applicants and the country. CAPIC believes that their response and accompanying suggestions would “meet public confidence, public policy, and program integrity criteria, and would increase the program’s contribution to advancing Canada’s economic recovery.”
You can read the full details of the CAPIC response and their overview of proposed changes here.
The final decisions of the ESDC, and whether or not CAPICs response will have any bearing, is yet to be determined. What is evident, however, is that changes to the Owner Operator program are coming. Sign up for our newsletter to stay current on the latest information.